A pay level in an organization is the standard of income remunerated by an employer or a company, to a worker across diverse jobs or skill clusters. On the other hand, pay structure refers to disparities in disbursement among employers based on varied kinds or ranks of work or qualifications. Additionally, pay inequality is the unequal disbursement of income to employees of the same job category; having similar qualifications.
In this case, pay inequality can be a result of gender inequality, ethnic or racial chauvinism within organizations or any other place of work. Based on this, paying some employees less than what they deserve as per their job category and qualifications; reduces their motivation in the job which can in the long run lead to a decrease in productivity. It is clear from the statements of Commissioner Dominica Whelan that, “in practice, the principle of equal pay for equal work is still an abstract justice rather than practical practice”. This means that inequality in payment is a thing that occurs in many organizations where especially women are lowly paid; as compared to men of the same job category (Nelson & Bridges 1999).
In this case, women’s work which is not disbursed such as child nurturing and home-making chores is not included in the Gross Domestic Product. In order to discuss pay inequality, pay equity needs to be considered. From this, according to the ‘Queensland Government’; there are attempts to regard the wide variety of concerns that are fundamental and contributing to the payment gap; between men and women.
Based on this it can be argued that pay inequality is inequitable and inefficient since the lowly paid employees; women, in this case, are denied privileges like a rise in financial liberty as well as the status and self-esteem attached to women’s work. On the other hand, women who realize that a male workmate received dissimilar payment levels may take it as an individual insult and a personal problem; hence recognizing the disparity in how they are appreciated which would result in reducing their productivity (The Parliament of the Commonwealth of Australia, 2009).
On the other hand, the vertical pay gap has been denoted as the process of paying laborers of higher caliber jobs more as compared to those of low caliber jobs. From this, it can be argued that in most cases the lower caliber workers despite the fact that they are paid lowly, perform more tedious and time-consuming tasks than managers and supervisors.
An example here can be seen from a story building construction task where the casual laborers and masons who perform the task of constructing are paid less as compared to foremen whose work is only to supervise the construction. Based on this, there are instances of pay inequality in terms of vertical pay which reduces the worker’s motivations; hence inefficiency. It can be argued that, if laborers are paid in correspondence with the tasks they perform, the low-caliber workers would be paid more than the higher ones.
In Australia, women have been found victims of pay inequality as it can be seen in the ‘August 2007 Australian payment scene’; where female employees were paid $680 per week compared to the males who received $1022 per week despite the fact that women to a great extent, contributed in part-time employment. This can be used to denote that pay equity is inequitable, where male employees are highly remunerated as compared to female employees of the same job category (Barr 2004).
Further; it can be argued that pay inequality is inefficient as has been indicated by United Kingdom researches that disbursement inequality based on gender; deteriorated the UK output and that important achievement would be made from increasing females’ payment. Based on this, it can be argued that improving the contribution levels of women and their place in the labor market inclusive of their remunerations; would have a major consequence in increasing overall monetary performance according to ACTU.
In addition, it can be said that pay inequality among women brings about inefficiency since when women are remunerated on an equal basis as men; labor force contribution among them is advanced. By doing this, improves the value of the labor market and helps in supporting the tax base of an elderly populace. In this case, in a company where there is equity in payments; men and women are spread out to all ranks within the company. From doing this, increased work efficiency will be realized; since some women may be much talented in given areas than the men occupying those posts. By doing this, men and women could support each other resulting in teamwork hence increasing productivity.
For instance, in a recruitment panel which is well represented by both men and women; it would result in recruiting quality potential job seekers than when it is represented by men only. From this, it can be said that, pay inequality reduces productivity among the lowly paid parties; as they are not motivated hence lowering their self-esteem. It is of importance to note that, pay equity enhances efficiency in an organization since remunerated work is an imperative facet of women’s individuality; which permits them to utilize their work experience to continue developing proficiently (The Parliament of the Commonwealth of Australia, 2009) (Shulman 2005).
On the other hand, it can be said that pay inequality is inequitable as there is an uneven partaking in part-time and informal employment. Based on this, there are a few chances for expertise expansion and improvement; resulting in a large number of women working in low-ranking jobs. Further, the unpaid work of women in domestic chores restricts them from being promoted at work; as they lack opportunities to advance their job experience through education. It can further be argued that women are in most cases paid lowly since they are employed in service; rather than manufactured goods’ related markets. Additionally, women are sexually discriminated and harassed by male bosses; resulting in their being paid low in order to compromise for a pay increase (Frank 2007).
As a matter of fact, in most organizations, aspects of pay inequality have been witnessed with women being the victims. In this case, they are employed in lowly paid job categories, and some are sexually assaulted. It is of importance to note that, some women are more qualified than men in certain jobs and hence they need to be paid equally. Further, it can be argued that pay inequalities lower the productivity of the lowly paid parties within an organization.
Barr, Nicholas, 2004. The Economics of the Welfare State. 4th ed. Oxford: Oxford University Press.
Frank, Robert H., 2007. Falling Behind: How Rising Inequality Harms the Middle Class. California: University of California Press.
Nelson, Robert & Bridges, William, 1999. Legalizing Gender Inequality: Courts, Markets and Unequal Pay for Women in America. Cambridge: Cambridge University Press.
Shulman, Beth, 2005. The Betrayal of Work: How Low-Wage Fail 30 Million Americans. Florida: New Press Publishers.
The Parliament of the Commonwealth of Australia, 2009. Pay equity and associated issues related to increasing female participation in the workforce. Canberra: Elect Printing.